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CIOT: Tax tribunal fees an attack on access to justice 22 September 2015

Proposals by the Ministry of Justice to introduce fees to take HMRC disputes to tribunal have been criticised by the Chartered Institute of Taxation (CIOT).

CIOT is arguing that an obligatory fee for cases to be heard in the First-tier Tribunal (FTT) Tax Chamber and Upper Tribunal (UT) Tax Chamber will adversely affect access to justice and is wrong in principle.

Taxpayers can appeal to the FTT, which is independent of government, when they dispute rulings made by HMRC. The Ministry of Justice has proposed fees of between £50 and £200 for referring cases to the FTT, with hearing fees to range from £200 to £1,000. Appeals to the UT would incur an initial fee of £100 and up to £2,000 for a hearing.

The Ministry of Justice has stated that its proposals aim to “deliver faster and fairer justice for all, protect the weak and the vulnerable and promote equality of all before the law”.

Chris Jones (pictured), CIOT president, said: “These proposals are counterproductive and wrong in principle. Rather than meeting the government’s stated objectives, the measures will increase bureaucracy and complexity, will fail to protect the most vulnerable taxpayers and are contrary to the interests of justice.

“Access to justice should be free to those who require it. Tax tribunal cases are between the citizen and the state, and in most cases initiated by HMRC. In this context it is particularly perverse that in order to fight charges levied by one branch of government an appellant would be obliged to pay another division of government.

“We understand the rationale behind wishing to discourage frivolous or vexatious cases, or to cover part of the costs of running the tribunal service and we would accept that there is a good case for considering charges targeted at higher value tribunal disputes. However, the effect will be to deter some potential applicants, including many of modest means, and prevent them seeking access to justice when they have a perfectly good case.

“If the fee structure is introduced as proposed then in our view the successful party’s fees should be payable by the unsuccessful party. The possibility of recouping the application fee will provide some balance and require recognition by HMRC that taking a dispute to the tribunal has a financial consequence.

“In the meantime, a radical overhaul is needed of HMRC’s reviewing processes in order to prevent cases getting to the tribunal in the first place. The success of HMRC’s Alternative Dispute Resolution service testifies to the fact that tribunals should be regarded as a last resort where possible.”

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